Once more unto the breach, dear friends, once more!

Happy New Year and once more unto the breach, dear friends, once more.

With it being my first day back in front of screens, this piece is likely to be a brief one as I come to terms with what the new year has to offer. I dare say the story is going to be similar across markets as many do likewise. With marquee events on the horizon later this week including the ECB, BoE and NFP on tap few will likely be too keen to commit too early on. News over the weekend had a soft print in Chinese data making headlines while a story in a UK paper talking about Carney likely to drop threshold unemployment levels in his forward guidance from 7 to 6.5% was the main source of focus on this side of the pond.

This morning’s data was softer on the whole but also did little if anything to really rattle markets first thing on a Monday morning.
This afternoon sees the print of US final services PMI as well as non manufacturing ISM and factory orders. While later in the US afternoon Janet Yellen will face the final vote to confirm her position as the new FED chairperson.

With regard the various crosses, well first looking at the likes of Cable, EURUSD and AUDUSD, I see the following;

EURUSD: While taking a decent bounce out of the lows (1.3570) the upside so far looks somewhat muted, but certainly the path of least resistance. I still look for the 1.3570/80 area to hold any further downside forays, while above 1.3630 there are some stops left by sellers first thing this morning and from Friday night.

GBPUSD: The proud pound has no reason to look south save for some correctional bias and profit taking. Data remains buoyant in the UK and the currency should continue to reflect this. Levels seen around year end however will be a bridge too far for the time being I fell. I look for consolidation around the 1.6330/00 level (lows seen this morning already) and buyers as well as profit takers on shorts to be seen around there. The topside however will initially struggle above 1.6430 and we likely won’t test those levels until we get another headline or data print.

AUDUSD: The little battler continues to confound, puzzle and demoralize those attempting to trade it. The pair is overdue a short squeeze of sizeable proportion, but today just won’t be the day for that to happen I fear. The 0.9000 level is key for purely psychological reasons rather than anything else and above there the real level to keep an eye on is the 0.9030 hurdle. On the downside sheepish buyers are seen into the 0.8950/30 area, with stops noted sub the 0.8910 level. Of equal importance however is the EURAUD which demands you keep your eye on it for further clues in the direct leg.

A fresh start to a fresh year and I wish you all the best of luck in 2014.
Don’t forget those helmets!